Is Price More Important than the Terms in an Offer?

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Today, I want to talk about something we always talk about, whether you're a buyer or seller. For some reason, people always focus on the price. That drives me wild sometimes because price is not the only factor to consider in the home buying transaction. When negotiating, we always encourage you to look at price and terms. Sometimes, the terms are more important than the price. You have to look at the big picture.

Here's an example for buyers. I've seen buyers negotiate for three days, and then they got the deal they wanted. They got 1,000 bucks less than what they expected to. That's great! But then, they go to the same bank they've always done business with to handle the financing. They don't shop around, and wind up paying a quarter point more on a 30-year mortgage.

Guess what? If you do that, you've just blown that 1,000 bucks you spent three days negotiating for, and then some! That quarter point will cost you way more money than $1,000 over the next 30 years.

As for sellers, we see you guys holding out for top dollar all the time. Then, we take a look at the seller's situation, and it turns out they're moving into a new construction home. The reality is, they have to move into temporary housing before their new home is ready. So sure, you get the bragging rights of getting top dollar, but you have to move twice.

In the long run, the inconvenience and cost of temporary housing probably cost more than getting that top dollar. It might have made more sense to take a lower offer with a closing period that allowed them to move directly into the new construction property.

Ultimately, my thought for the day is this: Don't focus solely on price. Think about your carrying costs or mortgage costs. As your real estate agent, we will help you consider the offer from every angle in order to save you money in the long run.


If you have any questions, give me a call or send me an email. I would be happy to help you!